Figure 1.--Slovenia did better than the rest of Yugoslavia during the Communist era, but still far west than the capitalist countries of Western Europe. This photo was taken in the suburb of Maribor, Slovenia during 1955. Boys are taking firewood home. You might have seen images like this before World War II in Western Europe, but not after the German Economic Miracle which began in 1948 began to transform all of Europe. The photigraph is notable because it shows boys working on their own to earn a little pocket money by collecting and selling fire wood. This may seem unremarkable, but at the time such activity could get one arrested throuhghout the Communist world. Suppressing economic activity is at the heart of why Communism and Socialism fail whereever tried.
The Slovene economy was dominted by agriculture. It was not touched by the Industrial Revolution. The Austriam who controlled Slovenia did not industrialize like Germany. Instead in both Austria and Slovenia, there was a long tradition of crafts and artisan production with little or no industry. Only in the early-20th century did Slovenia begin to modernize and diversify the economy. This continued during the royal period. Slovenia emerged as the most propsperous area of Yugoslavia and this continued during the Communist post-World War II era. Stalinist economic models called for heavy investment in heavy industry with little consideration of profitability. Thes big enterprises were all state owned. Coal resources helped fuel the news heavy industries. Economic development continued adter Tito's break with Stalin (1948), but with a degree market-oriented 'self-management' form of socialism for smaller rnterprises not permitted in the rest if the Soviet empire. While this was not as efficent as market capitalism, it was more efficent than the economies of the East Bloc countries. The Slovene economy proved to be the star of the Yugoslav federation. Slovenia was a small part of the Yugoslavia, less than 10 percent of the country's population. But with its well educated population, Slovenes 20 percent of the country’s GDP and 30 percent of its exports. Gradually Slovenia dominted by Serbian Communist leaderhip began to stagnate economically. Communist controls limiting market forces and rising debt levels caused increasing problems. Especially galling to the Slovenes was the Communist central government’s policy of distributing subsidies from the more prosperous northern market-oriented republics to the less-affluent and often corrupt southern republics. This essentially was a policy punishing economic efficency and rewarding coruption and inefficency. Combined with ethnic differences it was a major driver leading to the breakup of Yugoslavia and independence from Yugoslavia, meaning essentially Serbia and Communism. This led to major problems. The inherent unprofitability of 'socially owned' enterprises were exposed. And Slovenia lost it s markets which before independence werre primarily in the former Yugoslavia.
The Slavs
Slovenia was populated by Slavic tribes in their overall migration into the Balkans after ythe collapse of the Roman Empire. The Slovenes had settled into their modern location (6th centyry AD). The lsnguage they spole at the time was similar to the Croatians to the south, but over time evolved into a separate language. The Slovene economy like the rest of urope was lsargely agriculturale. Slovenia is hilly and mountainous, but has fertile river valleys where cereal grain could be grown. Wheat nd othrr grains were important because they areneeded for bread. The European climate it not, however, the most suitble growing enviriment. Fruit orchards bcame imprtant. Stock raising and dairy also became importatt. The mounneous slopes are forrested and thus Slovenia develop wood product economic activity. Thid of course was similar to economic activity in what is now Austria to the north. .
Holy Roman Empire (9th century AD)
he Slovenin dukes were threated from the Avars and formd an alliance with the Bavarians who were associated with the powerful Franks (around 743). This began a relationship with the Germans that would last a milennium. Slovenia became prt of the Oly Roman Empire.
Austrian Hapsburg Rule (1270-1918)
Austrian rule of the Duchy of Carniola began (1270). The agricultural potential of Slovenia and Europe in Genrral was nhnced when the DSoanish as a result of the cinques of Peru, introduced the potato to Europe. Unlike wheat, this was a cropo ideally sdited to northern Europe. The Austrians who controlled Slovenia did not industrialize like Germany. Instead in both Austria and Slovenia, there was a long tradition of crafts and artisan production with little or no industry.
Slovenia was not touched by the Industrial Revolution. The only area of the Austrian Empire which industrialized was the Czech Lands. Only in the early-20th century did Slovenia begin to modernize and diversify the economy, but there was still little industry at the time of World War I .
Royal Yugoslavia (1923-41)
After World War I, Slovenia was combined with other Skabuv states to form the Yugoslavian Kingdom under the Serbian monarchy. Austraia was leftba small Alpine Republic. Slovenia continued to diversify during the royal period. Slovenia emerged as the most propsperous area of Yugoslavia.
The Communists who seized control of Yugoslavia at the end of World War II put an emphasis on heavy industry during the post-World War II era. The Yugpslav Coomunist uhorities ascin other Comminist countries called for massive investment in heavy industry. It was the Stalinst model. Coal mining to fuel the new heavy industries became important. While the Stalinist economic model called for priority investment in heavy industry, no comsideration was given to profitability. As a result there was a huge mislocation of resources. These big enterprises were all state owned. Coal resources helped fuel the news heavy industries. Economic development continued after Tito's break with Stalin (1948), but with a degree market-oriented 'self-management' form of socialism for smaller enterprises not permitted in the rest if the Soviet empire. While the Yugoslav economy was not as efficent as market capitalism, it was more efficent than the economies of the East Bloc countries. Yhis while Western Europe experienced a series of economic miracles, the Stalinist ecomomies of Eastern Europe languished. The Slovene economy, however, proved to be the star of the Yugoslav federation. Slovenia was a small part of the Yugoslavia, less than 10 percent of the country's population. But with its well educated population, Slovenes 20 percent of the country’s GDP and 30 percent of its exports. Gradually Slovenia dominted by Serbian Communist leaderhip began to stagnate economically. Communist controls limiting market forces and rising debt levels caused increasing problems. Especially galling to the Slovenes was the Communist central government’s policy of distributing subsidies from the more prosperous northern market-oriented republics to the less-affluent and often corrupt southern republics. This essentially was a policy punishing economic efficency and rewarding coruption and inefficency. As a result, very few industrial enterprises in the Soviet Uniion and the Soviet Eastern European empire survived the fall of Communism, they all quickly went bankrupt. .
Independence (1991- )
Combined with ethnic differences, Communist economic policieswere a major driver leading to the breakup of Yugoslavia and independence from Yugoslavia, meaning essentially Serbia and Communism. This led to major problems. The inherent unprofitability of 'socially owned' enterprises were exposed. And Slovenia lost it s markets which before independence werre primarily in the former Yugoslavia.
